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30 Cards in this Set

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  • Back
What is sole proprietorship?
A business that is owned and mangaged by one person.
What are the advantages of a Proprietorship? (name 5)
1. Ease of starting and ebding the busniess
2.being your own boss
3.pride of ownership specail taxes
5.retention of company profits.
Describe a corporation..
a corporation is a legal enit wiht authoriy to act and have liability separte from its owners.
What are the disadvantages of a sole prorietorship? (name 5)
1. Unlimited liability $ resources
3. management difficulties faced alone
4.overwhelming time commitment
5. limited life span
Describe a general partnership?
in whihc all owners share operating the busniess and assuming liability for all busniess debts.
What is a partnership?
A legal form of business wiht 2 or more owners
Disadvantages of partnerships? (name 4)
1. unlimited liability
2. division of profits
3. disagrements amoung partners
4. difficlt to terminate
What is a general partner?
a partner who has unlimited liability abd us active in managing the firm
Avantages of partnerships? ( name 4)
1. more financial resources
2. shared management, knowledge and skills
3.longer survival
4. no special taxes
What is a limited partnership?
one or more generl partners.
what is a limited partner?
a owner who invest $ in the business but has no management responsibility or liability for losses.
describe the meanign of limited liability?
the responsibility of a busniess owner for losses only up tpo the amount they invest.
(mlp) master limited partnership?
looks like a corporation but is taxed like a partnership and thus avoids the corporation income tax.
(llp) limited liabitlity partnership?
limited partners risk of losing their personal assets to only their own acts and omissions of people under their supervision.
List 5 advantages of a corportation?
1. Limited liability
2. more money for investiments- sellign stock and bonds
3.size -raise large amounts of $ to buy new businesses and eqip
4.preptual life
5.ease of drawing in new talented employees.
Disadvantages of corporations?
1. Extensive paperwork
2. size- hard top adapt to change in the markets dur to size
3. difficulty of termination
4. conflict wiht stockholders/ board of directores.
5. initial cost- empensice lawyers/accountants.
S- corportations?
a gov creation that is like a corporation but taxed like sloe proprietorsip and partnerships
(llc) limited liability company?
similar to a s-corporation but without the special eligibilty requirments.
Advantages of limiter liability companies.
1. limited liability
2. choice of taxation
3. flexible ownership rules
4.operating flexibilty
5. flexible distribution of profit and losses
Disadvantages of LLC?
1. no stock- need approvel to sell interest. S-corporations can sell shares when ever life span
3.fewer incentives- no stock cant use stick as a benifit
4. taxes- self employeement taxes. where they are paid in sole and partner
5. paperwork
What is a merger?
teh results of 2 firms forming one company
What is acquistion?
one company's purchase of the property and obligations of another company.
describe a vertical merger?
the joining of 2companies involved in differnt stages of related businesses
What is a horizontal merger?
the joining of two firms in the smane industry.
Conglomerate merger? What is it?
the joining of firms in completely unrelated industries.
(lbo) leveraged buyout..... is..
an attempt by employees, management or a group of investors to purchase an organization primarly through borrowing
Franchises agreement?
an agreement where someones wiht a goos ides for a busniess sells the rights to use the busniess name and sell as product or service to oters i a given territory.
a company that develops a product concept and sells others the right to make and sell the product
the right to use a specific business name and sell its products or services in a given territory.
a person wqho buys a franchise.